Cost-efficiency - Cyprus

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PRB monitoring

  • The en route 2025 actual unit cost of Cyprus was 26.57€2022, -12.6% lower than the determined unit cost (30.41€2022). Cyprus does not have a terminal charging zone.

  • The en route 2025 actual service units (2.1M) were +12.2% higher than the determined service units (1.9M).

  • The en route 2025 actual total costs were -1.1M€2022 (-1.9%) lower than determined with all cost categories registering lower-than-planned costs, except exceptional items. In particular, other operating costs (-0.4M€2022, or -2.5%) and depreciation (-0.3M€2022, or -8.4%) for DCAC Cyprus were lower than planned. This was mainly due to the postponement of certain CNS costs and security-related costs for the new ACC that have not been materialised, and delays in projects implementation.

  • DCAC Cyprus costs of investments were 5.3M€2022 in 2025, -4.9% less than determined (5.6M€2022). According to the NSA, it is due to delays in the implementation of the secondary radar in Horteri, the upgrade of “AEROMED WEB” and “DME-DME infrastructure”.

  • The en route actual unit cost incurred by users in 2025 was 29.19€ (-9.3% below the 2025 DUC). The difference between the AUCU and the DUC is mainly driven by the traffic adjustments.

  • The en route regulatory result for DCAC Cyprus amounted to +4.5M€, or 9.8% of the 2025 revenue. This may indicate that the airspace users are charged for costs which have not materialised in 2025.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2025 2026 2027 2028 2029
Determined costs 59.9 63.0 67.2 70.0 74.9
Actual costs 58.2 NA NA NA NA
Difference costs -1.6 NA NA NA NA
Inflation assumptions 2025 2026 2027 2028 2029
Determined inflation rate 2.0% 2.0% 1.9% 1.9% 1.9%
Determined inflation index* 108.5 110.6 112.7 114.9 117.1
Actual inflation rate 0.8% NA NA NA NA
Actual inflation index* 107.1 NA NA NA NA
Difference inflation index (p.p.) -1.3 NA NA NA NA
*100 = 2022

AUC vs. DUC

In 2025, the en route AUC was -12.6% (or -3.84 €2022) lower than the planned DUC. This results from the combination of significantly higher than planned TSUs (+12.2%) and lower than planned en route costs in real terms (-1.9%, or -1.1 M€2022).

En route service units

The difference between actual and planned TSUs (+12.2%) falls outside the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional en route revenues is therefore shared between the ANSP and the airspace users (see the main ANSP regulatory result).

En route costs by entity

Actual real en route costs are -1.9% (-1.1 M€2022) lower than planned. This is the result of lower costs for the MET service provider (-11.4%, or -0.5 M€2022), the main ANSP, DCAC Cyprus (-0.9%, or -0.4 M€2022) and the NSA/EUROCONTROL (-2.5%, or -0.3 M€2022).

En route costs for the main ANSP (DCAC Cyprus) at charging zone level

Based on the additional information to the en route reporting tables, the slightly lower than planned en route costs in real terms for DCAC Cyprus in 2025 (-0.9%, or -0.4 M€2022) result from:

  • Higher than planned staff costs (+1.6%), mainly reflecting the impact of lower than planned inflation index (-1.3 p.p.) since costs in nominal terms were in line with the plan (+0.3%).

  • Lower than planned other operating costs (-2.5%), mainly due to the postponement of some planned expenditures related to CNS and security of the new ACC.

  • Significantly lower than planned depreciation (-8.4%), mainly due to delays to the implementation of planned projects (namely: secondary Radar in Horteri; AEROMED WEB Upgrade; DME-DME infrastructure).

  • Higher than planned cost of capital (+2.6%), mainly due to prepayments for investments under construction (namely: new ATM system – phase 4; new radar in Horteri; new primary and secondary Kionia radar and new Larnaca radar.)

Assessment of the actual performance in the charging zone reported by the NSA

The NSA of Cyprus provides the following overall assessment of the actual performance in 2025 at charging zone level:

“The actual costs are lower than the determined ones by 2.7% whilst the en route service units are higher than the forecast by 12.2%. The combination of the two parameters results to an actual unit cost (in real terms) which is lower than the determined unit cost (by 12.8%).”

[It should be noted that Cyprus submitted a revised Monitoring Report 2025 with the updated en route costs, but not all corresponding figures were updated in the analysis. As a result, some of the amounts indicated by the NSA cited above differ slightly from the amounts reported in the respective data tables in the same NSA Monitoring Report and in the submission of en route reporting tables (both of which are aligned).]

Explanation of the differences between actual and determined costs at charging zone level reported by the NSA

The NSA provides the following explanation for the differences between actual and determined costs in the charging zone:

“Actual overall ANS costs are lower (by 2.9%) than the determined costs foreseen in the RP4 PP. This is broken down as follows: Main ANSP -1.9%; MET -12%; State/NSA -3.3%.

The main reasons for these deviations are:

- Delays to or partial implementation of the recruitment plans of the ANSPs.

- Delays to or partial implementation of ANSPs’ organisational plans (leading to lower operating costs than those foreseen).

- Delays to or partial implementation of certain investments (leading to lower depreciation costs and cost of capital).”

[It should be noted that Cyprus submitted a revised Monitoring Report 2025 with the updated en route costs, but not all corresponding figures were updated in the analysis. As a result, some of the amounts indicated by the NSA cited above differ slightly from the amounts reported in the respective data tables in the same NSA Monitoring Report and in the submission of en route reporting tables (both of which are aligned).]

Recommendations formulated by the NSA to the ANSP (DCAC Cyprus) to rectify the situation and actions taken by the ANSP

The NSA 2025 monitoring report indicates the following recommendations formulated by the NSA:

“Strong recommendations were made to the ANSPs to implement more consistently their plans regarding the investments.”

DCAC Cyprus reports the implementation of the following actions:

“The ANSPs' Annual Plans will be modified so as to catch-up with the delayed investments.”

Actual unit cost incurred by the users (AUCU) (PI#1)

AUCU components (€/SU) – 2025
€/SU
DUC 32.19
Inflation adjustment -0.25
Cost exempt from cost sharing -0.40
Traffic risk sharing adjustment -1.66
Traffic adjustment (costs not TRS) -0.91
Financial incentives 0.21
Modulation of charges 0.00
Cross-financing 0.00
Other revenues 0.00
Application of lower unit rate 0.00
Total adjustments -3.00
AUCU 29.19
AUCU vs. DUC -9.3%
Cost exempt from cost sharing by item - 2025 €'000 €/SU
New and existing investments -558.1 -0.27
Competent authorities and qualified entities costs -244.6 -0.12
Eurocontrol costs -28.6 -0.01
Pension costs 0.0 0.00
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -831.3 -0.40

En route AUCU monitoring at charging zone level

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2025 (29.19 €) is -9.3% lower than the nominal DUC (32.19 €). The difference between the AUCU and the nominal DUC (-3.00 €/SU) is due to:

  • the negative inflation adjustment resulting from lower than planned inflation (-0.25 €/SU);

  • the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-0.40 €/SU);

  • the deduction of the traffic risk sharing adjustments (-1.66 €/SU);

  • the deduction of the traffic adjustment (-0.91 €/SU) for the costs not subject to traffic risk sharing; and,

  • the impact of financial incentives (+0.21 €/SU).

The share of the regulatory result (see next sub-section) in the AUCU (before the deduction of other revenues) is 7.9%.

Initiatives implemented or planned that will improve this PI reported by the NSA

The NSA of Cyprus provides the following information regarding the initiatives:

“The NSA conducts regular audits and inspections to verify the progress of the planned investments and to mandate for application of corrective measures (if and when the delays in investments are attributed to the ANSP).”

Regulatory result (RR)

DCAC Cyprus net gain/loss on activity in the Cyprus en route charging zone in 2025

DCAC Cyprus reported a net gain of +2.5 M€, as a combination of a gain of +0.1 M€ arising from the cost sharing mechanism, with a gain of +2.0 M€ arising from the traffic risk sharing mechanism and a gain of +0.4 M€ relating to financial incentives.

DCAC Cyprus overall regulatory result (RR) for the en route activity

Ex-post, the overall RR, taking into account the net gain from the en route activity mentioned above (+2.5 M€) and the actual RoE (+2.0 M€), amounts to +4.5 M€ (9.8% of the en route revenues). The resulting ex-post rate of return on equity is 11.8%, which is higher than the 5.3% planned in the PP.